Mild temperatures: European gas prices fall to their lowest level since June

The price of European natural gas continued the downward trend of the past few trading days on Tuesday.

On Tuesday morning, the TTF futures contract for Dutch natural gas was temporarily trading at EUR 80.00 per megawatt hour.

European natural gas was last this cheap in June.

According to estimates by the Federal Network Agency, the recent comparatively mild winter weather and more wind energy have led to lower consumption of natural gas.

In the further course of trading, the TTF futures contract, which serves as a benchmark for the European price level, was traded at EUR 82.60 per megawatt hour.

The gas price has been trending downwards since mid-December.

During this time, the TTF futures contract fell by around EUR 50 per megawatt hour.

The listing reached a record high in the summer of EUR 345 per megawatt hour.

At that time, a stop in the supply of natural gas from Russia triggered a rapid rise in the price of natural gas.

The main reason for the falling gas price has recently been mild temperatures, which keep natural gas consumption comparatively low.

During the Christmas holidays, the temperatures were significantly higher than in the middle of the month when permafrost prevailed in large parts of Germany.

Federal Network Agency establishes reference to wind power

In a message published on Tuesday morning on the short message service Twitter, Klaus Müller, President of the Federal Network Agency, explained the lower gas consumption with an increase in energy generation from wind turbines.

As a result, less gas was needed to generate electricity.

In addition, "lower exports to France would have helped".

In his statement, Müller also pointed out that well-filled gas storage facilities mean security of supply for this and the coming winter.

Thanks to the comparatively favorable weather recently, natural gas is being stored again in Germany.

According to the latest data from the European storage association GIE, the filling level in all German storage systems on Christmas Day was 217.1 terawatt hours, which corresponds to 88.22 percent of the maximum amount.

It was therefore an increase of 0.38 percentage points on the previous day and the fifth increase in a row.

Despite the recent relaxation, the price of European natural gas is still at a comparatively high level.

In 2020, the TTF futures contract was still below the EUR 20 mark.